• A strong rally in soyoil along with sizeable soybean export sales announcements from the USDA offered late-week support. The USDA reported nearly 12 million bu of soybean sales to an unknown destination. Additionally, there was another 4.6 million bu of new crop soybeans that were sold to China.

• Soybean processor bids have collapsed across the Midwest in the last two weeks. Crushers were able to extend coverage to harvest as both futures and basis rallied in mid-July. With the Midwest harvest less than 60 days out, old crop basis will weaken on Chicago rallies.

• The smaller US soybean yield in the August USDA report were more than offset the larger old crop stocks. The USDA made cuts in domestic, and exports based on pace. US soybean sales are running behind last year and Brazil will fulfil China demand during September.

• August weather will help in determining if the 2021 US soybean yield is 48 bushels/acre or 52 bushels/acre. It is still a wide range of yield outcomes with rain in the last half of August key to yield potential across the N Plains and the W Midwest.

• Chicago corn futures ended flat as post USDA bullish momentum faded. We noted at midday that August FSA acreage enrolment data suggests final corn seedings may be raised 500,000-700,000 acres. Final US sorghum seeding will be raised 500,000-1.0 million acres, which will add to US feed supplies. The outlook stays bullish, but the market must see-and-feel historically tight US stocks/use before large scale buying is sustained.

• Dec corn at $5.40-5.80 is aligned with the USDA’s current 2021/22 US balance sheet. US stocks and stocks/use will tighten steadily into winter, but the market in any given 30-day period has shown since late 2020 it will only trade fair value as determined by USDA. This is typical of demand-led markets, rallies slowly evolve. In the near-term, strong resistance is expected at $5.90-6.00 as harvest lies ahead, while downside below $5.50 is limited. As such, the strategy remains to use weakness to add to supply coverage. $6.00+ only occurs once world feed demand is fully shifted to the US in mid-autumn. Pro Farmer’s tour of the Midwest begins Monday.

• US wheat futures ended 1-10 cents higher on Friday led by spring wheat contracts. Market strength was a function of international markets reacting to record exporter stocks/use with September milling wheat in Paris rallying €9.50/mt. Wheat does have a major milling quality supply problem, and key in the next 30 days is whether importers opt to extend coverage at current prices.

• Disappointing Russian yields and historic Canadian drought have now been digested by the marketplace.

• Spot cash fob offers in Europe and the Black Sea have rallied to $295-310/ mt vs $230 just 45 days ago. Such prices have not been witnessed since the spring of 2013. Our bet is that importers maintain normal buying patterns amid food security issues, but global demand, not supply, is now in focus.

• The long-term outlook is bullish as physical supplies erode and dryness lingers in Argentina. Rallies will be laboured as Northern Hemisphere corn crops are gathered. Upside potential is pegged at $8.50+ during late autumn/winter assuming global consumption remains intact.

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